Haute Property in Mumbai

Goregaon, a suburb in North Mumbai, isn’t the preferred habitat of millionaires in India’s financial capital; they tend to flock to the tony southern tip. But rising up there, on a 4-acre site situated off the busy Western Express Highway, is Lodha Fiorenza, a cluster of four towers of luxury apartments designed by Jade Jagger in what constitutes the British designer’s first such foray into India. The cheapest pad costs $500,000, going up to $2.8 million for a 5,000-square-foot “sky villa.”

“There are no designer apartments like it in the area. Jade Jagger’s the big icing on the cake,” gushes Anu Gautam, a prospective buyer. She, along with husband Vineet Gautam, country head for retailer Bestseller India, which has the franchise for clothing chains Jack & Jones and Vero Moda, were recently invited to check out the project. Apartments are sold “by invitation only,” confirms sales executive Shivani Kulkarni, a former airline stewardess who’s part of Fiorenza’s eight-person sales team.

If showy residential towers are now old hat (if often empty) in an increasing number of Chinese cities, these kind of digs are still new to much of rising India. But they’re arriving in fits and starts.

With its gleaming white marble floor, minimalist decor and crew of white-gloved waiters bearing trays of lemon tea, the sales office at Lodha Fiorenza looks more like a plush salon than something makeshift on a construction site where a tall crane stands next to half-finished towers. The Gautams are whisked from the showroom’s scale model into a mini-theater to watch a four-minute film on Jade Jagger’s design mantra. Then it’s off to a tour of a fully furnished sample “sky villa.”

Complete with a plunge pool and fittings like a Poggenpohl kitchen, the duplex apartment is fancier than anything available in Goregaon, say the couple who moved from Delhi three years ago and like the location for its proximity to their workplace. They feel the premium pricing—$75 per square foot higher than prevailing rates plus the cost of furniture—is justified. “Others offer just bare walls. Here we can conceivably move in the day we get possession,” says Anu.

Offering such “fashionable living ” in an unfashionable suburb is one of several contrarian bets that seem to be paying off lately for developer Lodha Group. From being virtually unknown a decade ago, the firm has muscled its way into the top ranks of Mumbai’s property market. In recent land auctions it has snatched prime land parcels by offering what some say are outlandish prices.

This is in the context of what Samantak Das, research head of Knight Frank India, says has been a virtually stagnant realty market in the past year. Unlike in China, where the government had to take strong measures to cool a property bubble, in India the pre-2008 boom has tapered off amid an overall economic slowdown. Curiously, prices have yet to see a commensurate correction and, coupled with mortgage rates of over 10%, have put home ownership in cities like Mumbai and Delhi beyond the reach of the middle class.

But there’s enough new affluence to put Lodha on a building binge. It has 40 projects under way covering 35 million square feet, more than any other developer in the city. “Lodha has rewritten the rules of the game and broken the dominance of established players in Mumbai. This group doesn’t believe in recession,” says Sandeep Kotak, until recently the commercial realty head of Kotak Mahindra Bank, who oversaw the bank’s lending to various Lodha ventures.

The privately owned firm claims to have a one-fifth share of the city’s new building developments. It notched sales of $1.7 billion and claimed a profit of $550 million in the last fiscal year ended in March. The performance puts it almost on par in size with DLF of Delhi, the country’s most valuable property firm.

Depictions of Lodha’s exotically named apartment complexes under construction—such as Lodha Venezia, Lodha Evoq, Lodha Eternis—are visible everywhere: splashed on billboards across the city and in full-page ads in newspapers. They promise a lifestyle hitherto uncommon in Mumbai condos. The Venezia, for example, will have 2-acre waterscapes, multilevel pools and an observatory at 600 feet. Residences at Evoq are designed by Philippe Starck and feature, among much else, metallic-gold bathrooms.

Lodha’s core Mumbai presence is in what was once the heartland of the city’s textile mills and home to its mill workers. The area is getting a general face-lift, though in the absence of any urban planning, sections of old, gritty neighborhoods remain. Concerns also loom over whether the lagging infrastructure, typical in India, can cope with the influx of tony residents.

This is where Lodha’s corporate headquarters is situated and also its most touted project, the incipient 117-story World One. Billed as the globe’s tallest residence, its architect is noted New York firm Pei Cobb Freed, and each of its 290 apartments is designed by Armani. Aimed at the ultrarich, they start at $2.6 million, going up to $20 million for those on the highest floors. Lodha has pledged a chunk of the 18-acre plot of this showpiece for public spaces—parks, a museum and a high street of restaurants and shops.

“We don’t believe in cutting corners. We’re creating iconic buildings that will become landmarks in Mumbai and the subject of future postcards,” says Abhisheck Lodha, managing director of the group. A U.S.-trained engineer, he’s the older son of billionaire founder Mangal Prabhat Lodha.

Abhisheck and brother Abhinandan, who has an M.B.A. from the University of Cardiff, handle Lodha’s operations and are the public face of the group. Dad, who has a parallel career as a politician affiliated with the opposition Bharatiya Janata Party, focuses on the complex task of securing the gamut of approvals involved in construction and buying land in India.

Hailing from a family of legal luminaries, the older Lodha founded the firm in 1980 after moving to Mumbai from Jodhpur in Rajasthan state. He spent the next two decades building a good name in providing affordable middle-class housing in far-flung suburbs where land was cheap. In 2003, when the sons joined the family business—Abhisheck had done a stint at McKinsey & Co. before returning home—it had annual sales of under $20 million and a modest suburban land bank.

Noting that the country’s expanding economy had created an “outsize opportunity” to provide workplaces and residences to suit a new class, they set an ambitious goal: “We wanted to be among the top five developers in the country. There was no grand plan, only principles that we should do things well and not let any customer down,” recalls Abhisheck.

Their first big project was Lodha Paradise, 1,200 apartments in the suburbs, launched in 2004, with wide roads, green spaces and a clubhouse. “Aspirations were changing; customers were demanding more,” says Abhisheck.

Lodha got its first mill property in 2005, paying $33 million, a third more than the next highest bidder, for the 8-acre plot that today houses its headquarters and a 48-story residential high-rise. The penthouse on the topmost floor, which is yet unsold, has stunning views of a horse-racing track and the Arabian Sea.

In 2007 the Lodhas secured $300 million from Deutsche Bank in a deal that was touted as the largest foreign investment in Indian real estate at the time. The brothers recruited executives not from other developers but from consumer product and consultancy firms. Today 550 of the group’s 3,000 employees work in sales and marketing, unusually high for India.